“Our factory is expected to close in mid-December, and now we know that most factories in Anhui have this plan.” said Mr. Zhang, the person in charge of a weaving company.
Selling gray fabrics at a loss, making money depends on luck
Everyone knows that this year’s market has serious overcapacity. Companies that make some differentiated products are doing fine, and the competition is not so fierce. However, textile companies that make some conventional products will have a hard time.
Mr. Zhang’s company mainly produces pongee and polyester taffeta, which are conventional products among conventional products. The current operating rate is around 7%. Next, as the The business will slow down gradually. In fact, from the first half of this year, Mr. Zhang has already sensed that something is not right, and has begun to reduce the operating rate, including high temperatures, May Day, Mid-Autumn Festival, National Day, and weekends. Anyway, he takes holidays when he can, and finds an excuse when he cannot. Also have a holiday. There are really no orders, and we don’t dare to stock up on inventory. There have even been cases where the store was open for a week and closed for a week. But even with such caution, there are still nearly 30010,000 meters of gray fabric inventory.
This is already the basis for Mr. Zhang to accept orders at a discounted price. Due to the intense involution, every meter of gray fabric is now sold at a loss. Instead, it is an order for some fabrics, because some gray fabrics are bought from outside. The cost of processing is cheaper than that of self-produced products, and you can make some money. This has to be said to be a irony.
Mr. Zhang said that the largest amount of money this year was earned through exchange rate fluctuations. In March and April of this year, when Southeast Asia was receiving a large number of textile orders, Mr. Zhang exported a large amount of conventional gray fabrics. When the price was set, the exchange rate was only 6.4,6.5 , but when it came to the final settlement, the exchange rate broke 7. It must be said that it was a kind of luck. But this kind of luck is not replicable, and it is basically impossible to make money from it.
This year’s market situation: It’s over!
The closer to the end of the year, the greater the financial pressure on companies.
On the one hand, it’s because today’s companies are tight on money. It may take two pot lids to cover three pots, so they would rather hold off the money than make sure they have money; on the other hand, this year’s market situation Below, some companies are indeed experiencing problems with their survival and are on the verge of bankruptcy or even have already closed down.
So we see that after the market environment has finally improved for several years, it is becoming difficult to get payment for goods this year again.
In order to maintain cash flow, when there is no demand, weaving factories do not dare to prepare too much goods for next year, for fear of losing their hands, and downstream companies do not dare to place orders. In the end, the operating rate continues to drop. According to data monitoring from China Silk City Network,
Chunjiang Plumbing Duck Prophet, the textile market is in a downturn, and the reaction of upstream polyester factories is more real. Since last month, polyester factories have begun to promote shipments, and last week began to reduce production on a large scale. It is expected that in the future Reduce the boot rate to about 5%.
It can be said that for most textile companies, this year’s market is over.
Next year’s market situation: very blue
This year’s market is already like this. Will the market bottom out next year? Judging from the answers of textile workers, they are not optimistic about the market next year.
Overseas demand actually increased in the first half of this year, but since the start of the Russia-Ukraine war, Europe has experiencedThe blood loss in the second quarter, coupled with the Federal Reserve’s interest rate hike, has begun to attract stars. Starting from the third quarter, it can be clearly felt that the consumption power of overseas markets is shrinking. These situations are likely to intensify next year.
Judging from foreign experience, the country may also encounter pressures from inflation, labor costs, logistics and other aspects next year. These pressures will eventually be transmitted to the cost of the final product. For textile companies, this is also a need to prepare for a rainy day. things.
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